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EU Parliament Backs Standard VAT Return

by Ulrika Lomas, Tax-News.com, Brussels

28 February 2014


Algirdas Šemeta, EU Commissioner for Taxation, has welcomed the European Parliament's strong support, expressed on February 26, 2014, for a Standard VAT Return.

The Standard VAT Return is one of the Commission's key proposals to cut red tape for business and improve tax compliance in the EU. The standard return would replace national VAT returns, requiring businesses to provide the same basic information with the same deadlines regardless of their location within the European Union.

Šemeta commented: "This proposal is about making life simpler and cheaper for businesses. With the Standard VAT Return, it will be as easy to declare VAT abroad as it is at home. As such, it will remove a major tax obstacle in our Single Market and cut compliance costs by up to EUR15bn (USD20.5bn) a year. Moreover, simpler rules are easier to follow and enforce. So the Standard VAT Return should also boost tax compliance throughout the EU, bringing new revenues to the member states. I am very pleased – but not surprised – that the European Parliament has shown such backing for this growth-friendly, business-friendly proposal."

The Standard VAT Return is to have only five compulsory boxes for taxpayers to fill in. Member states would be allowed to request a number of additional standardized elements, up to a maximum of 26 information boxes. This is a vast improvement on the current situation, whereby some member states require up to 100 information boxes to be completed.

Every year, 150 million VAT returns are submitted by EU taxpayers to national tax administrations. Under the new regime, businesses will file the Standard VAT Return on a monthly basis, while micro-enterprises will only be obliged to file quarterly. The obligation to submit a recapitulative yearly VAT return, which some member states currently demand, would be abolished. The proposal also encourages electronic filing, as the Standard VAT Return will be allowed to be submitted electronically throughout the European Union.

The proposal for a Standard VAT Return across the European Union is part of the European Commission's work to create a more efficient and fraud-proof VAT system, as set out in its December 2011 Communication on the future of VAT.

TAGS: compliance | tax | business | European Commission | value added tax (VAT) | tax compliance | VAT legislation | VAT cross-border transactions | legislation | VAT compliance matters | Europe | Tax

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